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This is with reference to ‘Surprise! Full convertibility is on its way’ by Lokeshwarri SK (May 27). There are many conditions to be satisfied before capital account convertibility can be allowed. Fiscal deficit should remain under check. CAD should remain as narrow as possible. Inflation should not exceed the level which other countries similarly following CAC are maintaining. Since no line is drawn between current and capital account, it is the fluctuation in export and import, capital inflow and capital outflow which draws capital from capital account, putting pressure on the exchange rate and hence making everything adverse. So long as the trade deficit is not controlled when the economy is operating at the potential level, the pressure on the rupee is bound to be there.
The trade deficit is because of low productivity and an inefficient manufacturing sector. International financial centres are being set up to create ease for finances following the expansion of industries. It is only to convince foreign investors that there are many financial instruments that will safeguard their money in India. But its success depends upon the overall environment and ease of doing business.
There are many ways to shore up the currency to keep CAD and fiscal deficit under control momentarily. This is being done for the last two years but that does not mean CAC will be allowed immediately once the financial centres and rupee bonds are mobilised. With regard to money-laundering, the government is still in a fix whether GAAR should continue or be abandoned. Since capital inflow is dependent on the future expectations it does not take many investors to round trip and put in black money. Tax administration and CAC are closely related. Money-laundering is a taxation issue.
RK Arya
Faridabad, Haryana
The lottery scam
The Karnataka Chief Minister has dared to cock a snook at the Opposition by handing over the lottery scam probe to the country’s premier investigation agency, the CBI. The morale and image of the state police has taken a beating and the government’s decision is a step in the right direction.
The move also makes sense since the police could not be tasked to investigate themselves. Lottery has been banned in Karnataka since March 2007 and with the CBI investigation set to unravel events prior to this date many former chief ministers, political bigwigs and police officers could find themselves in the dock.
NJ Ravi Chander
Bengaluru
Ending medical extortion
With reference to the edit, ‘Disheartening situations’ (May 27), we need to ensure that rules around medicines and medical equipment are laid down. While exorbitant prices prevent the poor from availing of medical aid, they are also unfair to mediclaim insurance companies. We need to ensure that rates are always checked by regulators. We need to ensure that extortion is eliminated.
Kamal Anil Kapadia
Mumbai
An inspiring life
With reference to ‘The beautiful mind that was John Nash’ by Sudipta Sarangi (May 27), John Nash was not just a virtuoso mathematician; a peep into his life’s journey is equally inspiring. His 27-page doctoral thesis written at the age of 21 years is the envy of all scholars. When he had just turned 30, Fortune magazine named him one of the brightest mathematicians in the world. As his biographer Sylvia Nasar said, “John and Alicia’s lives experienced the extremes of human experience — genius and madness, obscurity and fame — together. Their story wasn’t only about the mystery of the human mind; it was also a love story. A very grown up love story.”
YG Chouksey
Pune
That’s harsh!
The CBFC’s decision to ban the release of a Tamil movie based on slain journalist Isaipriya’s experience claiming it would affect friendly relations with a neighbour seems to be harsh, given that similar films have been made. It is difficult to understand whether the ambiguity exists in the law or is dictated by the whims and fancies of the human mind.
Vikram Sundaramurthy
Chennai
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